Reservation Agreement
Definition
A reservation agreement is a contract signed when a buyer pays an initial holding deposit to secure an off-plan or new build property. It removes the property from sale for a defined period, typically 14 to 30 days, while due diligence is conducted and the main Private Purchase Contract is prepared. The reservation fee is typically 1% to 3% of the purchase price or a fixed amount such as 5,000 to 15,000 euros.
Why It Matters
The reservation agreement is your first formal commitment in an off-plan purchase. Its terms determine whether your deposit is refundable, how long you have to proceed to the Private Purchase Contract, and what happens if either party does not proceed.
Where It Appears in the Buying Process
The reservation agreement is the first stage of the off-plan purchase process, signed and paid immediately after agreeing to buy. It precedes the Private Purchase Contract (PPC) which is the main binding contract.
Related Questions
How Does Buying Off-Plan Work in Spain?
Buying off-plan in Spain follows a five-step process: reservation, private purchase contract, staged payments during construction, mortgage approval, and completion at the notary.
What Should I Check Before Reserving an Off-Plan Property?
Before reserving, check the developer track record, building licence status, payment schedule, bank guarantee structure, specification documents and the reservation contract terms.
What Is Off-Plan Property?
Off-plan property means buying a home before or during its construction, based on architectural plans and show units rather than the finished building.
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